Why the CIC plan to save the industry has to work  Derry Scully from Bruce Shaw Partnership argues that ignoring the CIC’s findings could result in the industry shrinking by almost 75% in four years with over 275,000 people loosing their jobs The Construction Industry Council (CIC) was established in 1991 to deal with issues of common interest for the construction industry in relation to overall policy matters. The CIC represents approximately 43,000 members from the following member organisations: • The Society of Chartered Surveyors (SCS) • The Royal Institute of Architects in Ireland (RIAI) • Engineers Ireland • The Association of Consulting Engineers of Ireland (ACEI) • The Construction Industry Federation (CIF) • The Building Materials Federation (BMF) CIC Submission to Government At the beginning of 2009, the CIC became concerned about the rapid decline in output of the construction industry and the very significant job losses that were becoming apparent. The Council commissioned a report to investigate these trends and to predict where the industry was headed over the coming years. The results of this investigation proved alarming and are summarised in the table below:

It is clear that an output level of €38.5 billion, representing 25% of Ireland’s total GNP was unsustainable but the predicted levels of decline are truly frightening. In just 4 years our industry could shrink by almost 75% with over 275,000 people losing their jobs. The industry would return to levels last seen in 1994 and the human cost would be devastating. Solutions The CIC report also identified that the long term sustainable level for the Irish construction industry would be approximately €18 billion. We are below this level at present. Rather than just accept this situation the CIC resolved to investigate possible solutions which would stem this catastrophic decline. As there is very little activity in the private sector it was clear that any stimulus would have to come from the public sector. When preparing it’s submission to Government the Council recognised several realities: 1. There is a real cost to Government of doing nothing – tax revenues will be foregone and social welfare payments will have to be made. 2. Ireland still badly requires significant infrastructure development. This is infrastructure in its widest sense and includes buildings for schools, colleges and hospitals as well as roads, water supplies and flood relief projects. 3. The Government finances are in a perilous position and additional borrowing is not a realistic option. 4. Over 90% of all money invested in Irish pension funds is invested abroad. Costs Against this background, the CIC devised a plan to save 70,000 jobs in the construction industry. This would require an investment of approximately €5 billion per year over a 3 year period. The cost of doing nothing is approximately €2.6 billion, leaving a further €2.4 billion required. In discussions with the Irish pension industry they agreed in principle to invest €2 billion and the balance can be sourced from the European Investment Bank. Proposals Suitable projects should be identified based on need, return on investment, employment potential and ability to get to site quickly. They should be procured on a simplified PPP model utilising existing contract conditions and avoiding lengthy delays while legal matters are finalised. Using such a procedure would have the added advantage that Government would not have to commence payments until the projects are completed, by which time, hopefully, the economy will be starting to recover. The CIC published these proposals in March and have had several meetings with the Departments of Finance and the Taoiseach. Positive The initial reaction from Government has been very positive and the CIC have been advised that the Department of Finance are investigating the details of how the scheme might be implemented. We have been promised a response by the end of June. Hopefully this will be a positive because, as I noted above, the industry is already below it’s long term sustainable level and too many people working with consultants and contractors have lost their jobs. Unless this decline is slowed our industry will lose many of the skills built up over the last ten years and our ability to attract high-tech foreign investments when the global economy recovers will be seriously impaired. This article was written exclusively for irishconstruction.com by Derry Scully, FSCS, FRICS. Derry is Chairman of Bruce Shaw Partnership Dublin and a Past President of the Society of Chartered Surveyors. He represents the SCS on the Construction Industry Council. Keep up-to-date with this story and more. Register NOW with the irishconstruction.com enewsletter >> For all the latest in construction news straight to YOUR desktop!